Larry Ellison’s Oracle plunges as AI drive fails to pay off

Core Viewpoint - Oracle's stock value has significantly declined due to concerns over its AI investments and disappointing quarterly financial results, leading to a loss of over $100 billion in market capitalization [1]. Group 1: Stock Performance - Oracle shares dropped by as much as 16.5% at the start of trading on Wall Street following the release of quarterly results that missed profit and revenue expectations [2]. - The company's market valuation peaked at nearly $1 trillion in September after announcing a $300 billion deal with OpenAI, but has since fallen by a third, resulting in a loss of over $300 billion in value [3][4]. Group 2: Investment and Debt Concerns - Oracle is increasing its investment in AI data centers despite the recent financial results, raising concerns about the profitability timeline of these investments [2][4]. - The company has faced scrutiny regarding its debt levels used to finance AI initiatives, with credit-default swap prices reaching a three-year high [5]. Group 3: Market Impact - The disappointing results from Oracle have negatively affected tech stocks globally, contributing to declines in major indices such as Japan's Nikkei and the US Nasdaq Composite [2][3][6]. - Concerns about an AI bubble and the sustainability of tech investments have been exacerbated by Oracle's financial performance and its aggressive spending on AI [4][6].